A shadow price is the value that reflects the true economic cost of a good or service, including externalities and other social benefits or costs. It is not necessarily the same as the market price, and can be used in economic analysis to account for the broader impact of a decision or policy.

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A Shadow Price Is

Question 26

Multiple Choice

A shadow price is

A) the price in the previous period.
B) the price in the next period.
C) the social value of a good or service.
D) the market value of a good or service.
E) none of the above.

Correct Answer: